Ryan v. Rosenfeld

Filed 6/15/17

IN THE SUPREME COURT OF CALIFORNIA

STEVE RYAN, )

)

Plaintiff and Appellant, )

) S232582

v. )

) Ct.App. 1/4 A145465

MITCHELL ROSENFELD, )

) San Francisco County

Defendant and Respondent. ) Super. Ct. No. CGC10504983

____________________________________)

Section 663 of the Code of Civil Procedure allows an aggrieved party in a

civil case to move the trial court to vacate its final judgment. The question in this

case is whether an order denying one of those motions is appealable even if it

raises issues that could have been litigated via an appeal of the judgment. We

answered yes to this question over a century ago. (See Bond v. United Railroads

(1911) 159 Cal. 270, 273 (Bond).) Bond held that the statute authorizing appeals

of postjudgment orders covered denials of section 663 motions. The current

version of that statute allows for the appeal of ―an order made after a[n appealable]

judgment.‖ (Code Civ. Proc., § 904.1, subd. (a)(2).) Orders denying motions to

vacate under section 663 fit that description, and this court has always interpreted

the language currently found in section 904.1, subdivision (a)(2), to make

appealable all section 663 denials. The Legislature has done nothing to undermine

or overturn that interpretation despite enacting over a dozen other changes to this

very statutory scheme. So the rule announced in Bond remains valid.

1

I.

Stephen Ryan sued his former business partner Mitchell Rosenfeld in 2010.

Four years later, the trial court dismissed the action on the grounds that Ryan had

abandoned the case. Two months after that, Ryan moved to vacate the judgment,

claiming he was ill and hospitalized in Mexico when the judgment issued. The

motion cited and quoted from section 663. The trial court denied the motion.

Ryan later filed a notice of appeal for both the order dismissing the case and the

order denying his motion to vacate the judgment. The Court of Appeal dismissed

the appeal as untimely, observing that the deadline to appeal the order dismissing

the case had passed. And though the appeal may have been timely as to the later

order denying the motion to vacate, the court ruled that an order denying a section

663 motion ―is not appealable.‖ We granted Ryan‘s petition for review, asking the

parties to brief this question: ―Is the denial of a motion to vacate the judgment

under Code of Civil Procedure section 663 separately appealable?‖1

II.

To resolve this case we must analyze two sections of the Code of Civil

Procedure. The first lists scenarios in which the judgment in a civil case ―may,

upon motion of the party aggrieved, be set aside and vacated.‖ (§ 663.) The

second provides that an appeal ―may be taken from‖ ―an order made after a

judgment made appealable by paragraph (1).‖ (§ 904.1, subd. (a)(2).) The

―paragraph (1)‖ referred to here provides that ―a judgment‖ may be appealed so

long as it is neither ―an interlocutory judgment‖ (with certain exceptions listed

1 Rosenfeld has argued in this court that Ryan‘s motion to vacate was

improper because the motion did not seek entry of a judgment different from the

one that was entered. We do not address this question, which may bear on

whether Ryan filed a proper section 663 motion. The Court of Appeal may

address the question on remand.

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later in the statute) nor ―a judgment of contempt that is made final and conclusive

by Section 1222.‖ (Id., subd. (a)(1).)

As with all questions of statutory interpretation, our fundamental task is to

determine and effectuate the intended purpose of the statutory provisions at issue.

(See Goodman v. Lozano (2010) 47 Cal.4th 1327, 1332 [―In interpreting a statute,

our primary goal is to determine and give effect to the underlying purpose of the

law.‖].) Our analysis begins with the statutory text, which usually provides the

best indicator of the relevant legislation‘s purpose. We generally assign statutory

terms their ordinary meaning, while also considering the context — which

includes related provisions and the overall structure of the statutory scheme — to

further our understanding of the intended legislative purpose and guide our

interpretation. (See Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8

Cal.4th 361, 378 [―our primary task is to ascertain legislative intent, giving the

words of the statute their ordinary meaning‖]; id. at pp. 378-379 [―words . . . must

be read in context, considering the nature and purpose of the statutory

enactment‖].)

Our opinion follows several earlier efforts by this court to resolve questions

nearly identical to the one before us today. What complicates this case somewhat

is the tension between one of those past efforts — in Clemmer v. Hartford

Insurance Company (1978) 22 Cal.3d 865 (Clemmer) — and virtually all of our

other holdings on this question. As early as 1911, this court ruled that ―an order

authorized by section 663 of the Code of Civil Procedure‖ ―is clearly an

appealable order.‖ (Bond, supra, 159 Cal. at p. 273.) Bond pointed to two

statutory provisions justifying this conclusion. First, we noted that ―[b]y section

963 of the Code of Civil Procedure, an appeal may be taken from any special order

made after final judgment.‖ (Ibid.) We concluded that an order ―denying the

motion to vacate the judgment‖ pursuant to section 663 was an order ―of that

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kind.‖ (Ibid.) Former section 963 was repealed and replaced in 1968 by section

904.1, which as amended continues to provide that an appeal ―may be taken‖

―[f]rom an order made after a judgment‖ that was itself appealable. (§ 904.1,

subd. (a)(2).) Then as now, the denial of a statutory motion to vacate a judgment

is an ―order made after a judgment‖ that was appealable.

Bond next noted that ―[s]ection 663a of the Code of Civil Procedure

declares that an order ‗granting such motion may be reviewed on appeal in the

same manner as orders made on motions for a new trial.‘ ‖ (Bond, supra, 159 Cal.

at p. 273.) The quoted section 663a language has been reworded in two ways

since the decision in Bond. Both changes were slight. First, the phrase ―same

manner as orders made on motions for a new trial‖ from the 1911 version is now

―same manner as a special order made after a final judgment.‖ (See § 663a, subd.

(e).) Second, ―such motion may be reviewed‖ from the 1911 version is now ―a

motion may be reviewed.‖ (Ibid.) Neither of these changes affected the question

decided in Bond. What we said about section 663a in 1911 remains true today.

This statute ―should not be construed so as to affect the right given by section 963

[now 904.1] to appeal from an order denying the motion, as from an order made

after judgment.‖ (Bond, 159 Cal. at p. 273.)

We reiterated Bond‘s rule in the decades that followed. In 1927, for

example, we held that there ―should be no uncertainty‖: ―an order denying a

motion to vacate and to enter a different judgment is appealable as a special order

made after final judgment.‖ (Delta Farms v. Chinese American Farms (1927) 201

Cal. 201, 202 (Delta Farms).) Our opinion acknowledged ―the obvious fact‖ that

―the very same matters may be reviewed‖ in an appeal from the underlying

judgment and in an appeal from a denied 663 motion. (Delta Farms, at p. 203.)

But we declared that ―our law gives a separate appeal from an order made by the

court on the motion referred to in sections 663 and 663a.‖ (Ibid.) We also

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recognized what we described as a well-established, generally applicable rule: No

appeal is possible where ―an order refusing to vacate a judgment or order does not

present any facts for consideration other than those which are presented upon

appeal from the judgment itself.‖ (Id. at p. 204.) But we held that this rule has

―no application to the special motions authorized by section 663 of the Code of

Civil Procedure.‖ (Ibid.)

The language in Bond and Delta Farms is as clear as it is directly relevant

to the issue before us here. We consistently affirmed the same interpretation,

moreover, in the years that followed. (See, e.g., Funk v. Campbell (1940) 15

Cal.2d 250, 251 [―[a] specific and separate appeal from an order made on a motion

under [section 663] is accorded the aggrieved party‖]; Winslow v. Harold G.

Ferguson Corp. (1944) 25 Cal.2d 274, 282 [―In those cases where the law makes

express provision for a motion to vacate — as under sections 473, 473a and 663,

663a of the Code of Civil Procedure — an order denying such motion is regarded

as a ‗special order made after final judgment‘ and as such is appealable under

section 963 . . . .‖].) In Funk, a concurring opinion added that ―it was the obvious

intention of the legislature that an appeal should lie from an order granting or

denying a motion to vacate a judgment made pursuant to sections 663 and 663a of

the Code of Civil Procedure, regardless of whether the grounds upon which said

motion is made existed before the entry of judgment and are available on an

appeal from the judgment.‖ (Funk, at p. 254 (conc. opn. of Carter, J.).)

The annals of our cases affirming the appealability of orders denying

section 663 motions even includes a case dealing with a factual scenario quite

analogous to Ryan‘s appeal. (See Socol v. King (1949) 34 Cal.2d 292.) Like

Ryan, the losing party in Socol appealed both the underlying judgment and the

later denial of a section 663 motion to vacate that judgment. Also like Ryan, the

losing party filed both appeals together –– past the deadline to appeal the

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underlying judgment. We found the appeal of the underlying judgment untimely,

but we also observed that the expiration of this deadline ―does not . . . leave an

appellant who has failed to take a timely appeal from the judgment completely

remediless‖ because ―an order of denial of a motion to vacate under section 663 is

appealable, notwithstanding that the same grounds could be urged on an appeal

from the judgment.‖ (Id. at p. 296.) Section 663 provides a basis for vacating a

judgment in a limited set of circumstances — some that overlap with issues that

can be raised in an appeal, some that do not. The Legislature‘s authorization of

appeals of special postjudgment orders allows appellate courts to review whether a

case presents those circumstances. Some section 663 motions may raise issues

that could have been raised in an appeal. But the statutory basis for section 663

motions has a different purpose relative to appeals, and the statutory limits on the

scope of section 663 motions help ensure these motions are not used merely as a

routine substitute to the normal appeal process. The opposing party in Socol had

argued nonetheless that an order denying a section 663 motion was not a ―special

order made after final judgment,‖ but we wrote that ―he cites no cases and we have

found none that supports this contention.‖ (Ibid.) We thus held that the notice of

appeal ―was timely and valid‖ in relation to the denied section 663 motion. (Id. at

p. 297.)

A few decades later, we again reiterated that ―an order denying a motion to

vacate made pursuant to Code of Civil Procedure section 663 has been held to be

appealable.‖ (Hollister Convalescent Hospital, Inc. v. Rico (1975) 15 Cal.3d 660,

663.) Just three years after that opinion, we decided Clemmer. This 1978 case

arose from the killing of Hugh Clemmer by a former employee named Daniel

Lovelace. (Clemmer, supra, 22 Cal.3d at p. 871.) Clemmer‘s family won a

default judgment in a wrongful death action against Lovelace and then sued

Lovelace‘s insurer the Hartford Insurance Company to recover the money. (Ibid.)

6

After the jury sided with the family, Hartford filed a motion for a new trial, a

motion for judgment notwithstanding the verdict, and a motion to vacate under

section 663. (Id. at p. 872.) The trial court denied the latter two motions, but it

granted the motion for a new trial on a partial issue. (Ibid.) Hartford appealed the

court‘s rulings on all three of the motions (the two that were denied in full, plus

the motion for a new trial that was denied in part). Hartford argued on appeal that

Lovelace‘s murder conviction collaterally estopped Clemmer‘s family from

asserting that the murder was not willful (the insurance policy apparently did not

cover willful homicides). We rejected this argument on the merits. (Id. at p. 877.)

Clemmer also referenced Hartford‘s section 663 motion. Our opinion said

a grand total of three things about this motion. First, the opening paragraph listed

the orders Hartford had appealed (―the orders of the trial court denying its motions

(1) for judgment notwithstanding the verdict, (2) to set aside and vacate the

judgment and enter a new and different judgment, and (3) for a new trial on all

issues‖) and stated that Hartford‘s ―appeal must be dismissed insofar as it purports

to be from the latter two orders, such orders being nonappealable.‖ (Clemmer,

supra, 22 Cal.3d at p. 871.) Second, a section labeled ―Other Contentions‖

observed that Hartford‘s ―final argument — that it was entitled to have the

judgment set aside and a new judgment entered pursuant to Code of Civil

Procedure section 663 because the findings of the trial court compel a

determination that plaintiffs are precluded from litigating the issue of willfulness

— is but a reassertion of its collateral estoppel argument couched in procedural

language, and we need not consider it further here.‖ (Id. at p. 888.) And third, the

opinion‘s ―Conclusion‖ section stated that the ―appeals from the orders denying

the motion to set aside and vacate the judgment and enter a new and different

judgment and the motion for a new trial on all issues must . . . be dismissed, said

orders being nonappealable.‖ (Id. at p. 890.) Our opinion provided no authority

7

for these statements, nor did the opinion explain why it deemed the section 663

order ―nonappealable.‖

Perhaps because of these lacunae, Clemmer‘s unexplained treatment of the

section 663 order has –– for years –– puzzled observers. One Court of Appeal, for

example, did its best to harmonize the discord in our jurisprudence by observing

that ―the precedential value of Clemmer is doubtful,‖ since the opinion dealt with

the section 663 order ―without discussion of the established rule, and in a

statement superfluous to the opinion.‖ (Howard v. Lufkin (1988) 206 Cal.App.3d

297, 302.) Another opinion questioned Clemmer‘s implications because the case

―did not in terms purport to disapprove the consistent line of earlier cases.‖

(Forman v. Knapp Press (1985), 173 Cal.App.3d 200, 202.) Nonjudicial

authorities have similarly downplayed Clemmer‘s treatment of the section 663

order in the case. (See 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 200, p.

277 [listing Clemmer as ―Contrary Dicta‖ and explaining that the opinion‘s

disposition of the section 663 appeal ―had no significant effect‖]; 1 Eisenberg et

al., Cal. Practice Guide: Civil Appeals and Writs (2014), p. 2-123 [―Clemmer

neither overruled nor, indeed, even mentioned the long line of precedent

establishing the ‗statutory motion exception,‘ and thus can be viewed as an

‗anomaly‘ not affecting that precedent.‖]; 4 Cal. Jur. (3rd ed. 2015) Appellate

Review, § 92 [noting that ―the courts have repeatedly ruled‖ that orders denying

section 663 motions ―may be appealed from, notwithstanding that the same

grounds could be urged on an appeal from the judgment‖].)

Whatever else is true of Clemmer, what we hold is that it did not overrule

our long-standing precedent. When this court departs from settled law, we seek to

explain the reasons for that departure. When an opinion defies our precedent with

no explanation, litigants and courts have no reliable way to discern whether that

departure was an oversight. This is especially true for an opinion like Clemmer,

8

where the inconsistency with settled law was not a central issue in the case. We

thus treat Clemmer‘s statement with more skepticism than we treat Bond and the

other prior cases analyzing this statutory scheme in greater detail. (See McHugh v.

Santa Monica Rent Control Bd. (1989) 49 Cal.3d 348, 358 [―When, as here, a

decision treats an issue in a ‗summary and conclusory‘ manner, and is ‗virtually

devoid of reasoning,‘ its authoritative status is undermined.‖].)

Our conclusion that Bond and its progeny offer the most reasonable

interpretation of this statutory scheme is also supported by decades of legislative

inaction in response to those opinions. Such acquiescence does not in all

circumstances imply the Legislature‘s embrace of a particular holding or doctrine.

(See People v. King (1993) 5 Cal.4th 59, 75.) But the question in this case

implicates a ―pattern of legislative inaction signaling acquiescence, as there exists

‗both a well-developed body of law interpreting a statutory provision and

numerous amendments to a statute without altering the interpreted provision.‘ ‖

(People v. Zambia (2011) 51 Cal.4th 965, 976, quoting Olson v. Automobile Club

of Southern California (2008) 42 Cal.4th 1142, 1156.) We observed 90 years ago

that ―it seems definitely settled that our law gives a separate appeal from an order

made by the court on the motion referred to in sections 663‖ ―notwithstanding the

obvious fact that . . . the very same matters may be reviewed‖ in motions to vacate

and in appeals of the underlying judgment. (Delta Farms, supra, 201 Cal. at p.

203, italics added.) That the Legislature has done nothing to question this

―definitely settled‖ view, despite making over a dozen changes to this statutory

scheme in the century since Bond, strengthens the basis for our conclusion.

A trip through the history of Code of Civil Procedure section 963 also

bolsters the inference that the Legislature accepted the interpretation we

articulated in Bond. At the time Bond was decided, the statute made both grants

and denials of motions for a new trial appealable. Four years after Bond, section

9

963 was amended so that denials of these motions were no longer separately

appealable. Section 663a was also amended at this time. Back when Bond was

decided, that section allowed appeals of section 663 grants in the same ―manner as

orders made on motions for a new trial.‖ But along with the amendment to section

963, section 663a was amended to allow an appeal in the ―same manner as a

special order made after a final judgment.‖ This phrasing tracked the language

Bond had relied on to hold that denials of section 663 motion are appealable. (See

Bond, 159 Cal. at p. 273 [―By section 963 of the Code of Civil Procedure, an

appeal may be taken from any special order made after final judgment.‖].) These

parallel amendments to sections 963 and 663a add even more support to the

inference that the Legislature approved Bond‘s reading of the statutory scheme.

Rosenfeld nonetheless argues that we should change our view because

―[t]ime has passed and the law has evolved,‖ such that ― ‗[t]his order‘ is no longer

‗one of that kind,‘ as the Bond court called it.‖ Rosenfeld‘s ―no longer one of that

kind‖ argument here is based in part on our opinion in Lakin v. Watkins Associated

Industries (1993) 6 Cal.4th 644. Lakin ruled that orders denying attorney fees are

appealable. (See id. at p. 649.) In analyzing this question, we observed that ―not

every postjudgment order that follows a final appeal judgment is appealable‖

because one of the ―requirements‖ ―a postjudgment order must satisfy‖ ―[t]o be

appealable‖ ―is that the issues raised by the appeal from the order must be

different from those arising from an appeal from the judgment.‖ (Id. at p. 651.)

There was no question that the attorney fees order in Lakin met that requirement,

since an ―order denying attorney fees . . . plainly raises issues different from those

arising from the judgment itself.‖ (Ibid.) Rosenfeld argues that ―[d]enials of

motions to vacate judgments under 663 generally do not‖ meet this requirement,

so Lakin bars Ryan‘s appeal.

10

Yet Lakin‘s holding creates no such bar. The case addressed an order

denying a motion for attorney fees. Although its analysis restated the general rule

that postjudgment motions should not substitute for appeals of the final judgment,

we had no reason to address the long-standing exception to this rule for statutory

motions to vacate. Despite Rosenfeld‘s contention that Lakin silently overruled

that exception, a statutory motion to vacate was not even at issue in Lakin. This

court has continued to apply the exception in the years since Lakin. (See People v.

Totari (2002) 28 Cal.4th 781, 886-887 [noting that ―the ‗no second appeal‘ rule

loses its urgency‖ ―[o]nce the Legislature . . . affords . . . a means to obtain relief

by way of a statutory postjudgment motion to vacate‖].) Totari held that criminal

defendants can appeal orders denying motions to vacate the judgment. A previous

opinion had deemed a similar order nonappealable, but we explained that the

previous case involved a nonstatutory postjudgment motion to vacate, rather than

a statutory one. (Id. at p. 887.) Though Totari was a criminal case, we confirmed

that the same rule also applied to civil cases. (See id. at p. 888 fn.5.) Totari is our

most recent case to address the appealability of orders denying motions to vacate

— and it stated the correct rule.2

Rosenfeld contends otherwise by quoting our statement that ― ‗exceptions

to the one final judgment rule should not be allowed unless clearly mandated.‘ ‖

(In re Baycol Cases I & II (2011), 51 Cal.4th 751, 757.) This statement is true as

2 This distinction between statutory and nonstatutory motions explains the

difference between Ryan‘s case and the three cases Rosenfeld cites to argue that

―the court‘s rulings have not been entirely consistent.‖ (See Southern Pac. R.R.

Co. v. Willett (1932) 216 Cal. 387, 390; Title Ins. & Trust Co. v. California Dev.

Co. (1911) 159 Cal. 484, 487; Kent v. Williams (1905) 146 Cal. 3, 11.) None of

those three cases referred to statutory motions, whereas Bond, Delta Farms, Funk,

Winslow, Socol, and Hollister all affirmed the appealability of orders denying

section 663 motions.

11

far as it goes –– but does not get Rosenfeld far in this case. What we recognized

in Baycol was that section 904.1 ―codifies the common law one final judgment

rule‖ and ―lists various specific additional appealable orders that stand as

exceptions to the general rule.‖ (Id. at p. 756 & fn.3.) One of these specific

exceptions is ―an order made after a[n appealable] judgment.‖ (§ 904.1, subd.

(a)(2).) This is the ―clearly mandated‖ ― ‗exception[] to the one final judgment

rule‘ ‖ (Baycol, at p. 757) that makes the trial court‘s order in this case appealable.

The text and structure of section 904.1 show that the Legislature authorized

appeals of all orders granting or denying section 663 motions –– just as we long

held. Clemmer‘s suggestion to the contrary is overruled.3

3 We also disapprove the holdings of the following Court of Appeal cases to

the extent they are inconsistent with this opinion: Payne v. Rader (2008) 167

Cal.App.4th 1569; City of Los Angeles v. Glair (2007) 153 Cal.App.4th 813;

Neufeld v. State Bd. of Equalization (2004) 124 Cal.App.4th 1471; and Pitino-

Capasso Fruit Co. v. Hillside Packing Co. (1928) 90 Cal.App. 191.

12

III.

By enacting section 663, the Legislature allowed litigants and other

aggrieved parties to secure postjudgment relief in some circumstances and to raise

certain issues that could not be raised in an appeal of the judgment. All our prior

cases have interpreted the statute authorizing appeals from postjudgment orders to

include appeals of rulings denying section 663 motions. A statutory appeal from a

ruling denying a section 663 motion is indeed distinct from an appeal of a trial

court judgment and is permissible without regard to whether the issues raised in

the appeal from the denial of the section 663 motion overlap with issues that were

or could have been raised in an appeal of the judgment. This approach is the most

reasonable in light of the text, structure, and context of the relevant statutes,

because the statute authorizing appeals from postjudgment motions provides for

appeals from postjudgment orders without reference to the substance of the issues

analyzed in an order. Clemmer‘s unexplained departure from this view was

mistaken.

The Court of Appeal‘s order dismissing the appeal of the section 663

motion is vacated and the matter is transferred back to that court. On remand, the

Court of Appeal may choose to address aspects of Ryan‘s appeal that have not

been addressed yet, including the argument that Ryan did not properly file a

section 663 motion and the argument that Ryan‘s appeal of the section 663 order

was untimely.

CUÉLLAR, J.

WE CONCUR:

CANTIL-SAKAUYE, C. J.

WERDEGAR, J.

CHIN, J.

CORRIGAN, J.

LIU, J.

KRUGER, J.

13

See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Ryan v. Rosenfeld

__________________________________________________________________________________

Unpublished Opinion

Original Appeal

Original Proceeding XXX

Review Granted

Rehearing Granted

__________________________________________________________________________________

Opinion No. S232582

Date Filed: June 15, 2017

__________________________________________________________________________________

Court: Superior

County: San Francisco

Judge: Cynthia M. Lee

__________________________________________________________________________________

Counsel:

Wilson, Elser, Moskowitz, Edelman & Dicker and Robert Cooper for Plaintiff and Appellant.

Jon B. Eisenberg, Margaret A. Grignon, Robin Meadow, Robert M. Gerstein, Dennis A. Fischer, Robin B.

Johansen, Laurie J. Hepler, Michael G. Colantuono, Rex Heinke,; Degani Law Offices and Orly Degani for

California Academy of Appellate Lawyers as Amicus Curiae on behalf of Plaintiff and Appellant.

FisherBroyles and Daniel L. Alexander for Defendant and Respondent.

Counsel who argued in Supreme Court (not intended for publication with opinion):

Robert Cooper

Wilson, Elser, Moskowitz, Edelman & Dicker

555 South Flower Street, 29th Floor

Los Angeles, CA 90071

(213) 443-5100

Daniel L. Alexander

FisherBroyles

5405 Wilshire Boulevard, Suite 257

Los Angeles, CA 90036

(213) 297-7301